Focus on industrial production data from the Federal Reserve
European stocks fell, after a third weekly gain in four, amid global economic growth concerns as Japan unexpectedly slipped into a recession. U.S. stock-index futures and Asian shares also declined.
The Stoxx Europe 600 Index lost 0.4% to 334.18 at 11:20 a.m. in London after sliding as much as 0.8%. The gauge rebounded 8.3% from this year's low on Oct. 16 through the end of last week as the Bank of Japan unexpectedly boosted its stimulus and most lenders in Europe passed capital-strength tests. It traded at 15.3 times the projected earnings of its members on Nov. 14, up from 14 times last month.
“After a significant rally on the Bank of Japan's decision to introduce more stimulus, the market is reacting to shock that there was actually a recession there,” said Francois Savary, chief investment officer of Reyl & Cie. in Geneva. “It's time to take back some of those gains but not to overreact. We have a very divergent economic cycle between the U.S. and the rest of the world. The weakness of Japan really increases the fact that we rely too much on the U.S. to support global growth.”
The Japanese economy, the world's third largest, shrank an annualized 1.6% in the three months through September, following a revised slump of 7.3% in the previous quarter. That missed projections for a 2.2% gain in the third quarter. The Bank of Japan holds its monetary policy meeting this week.
Standard & Poor's 500 Index futures declined 0.3%. Federal Reserve data Monday may show industrial production in the world's largest economy rose 0.2% last month, following a 1% gain in September.
The MSCI Asia Pacific Index dropped 1.3%, with Japan's Topix index slumping 2.5%.
BANKS DROP
In Europe, 15 of 19 industry groups in the Stoxx 600 declined, with a gauge of banks contributing the most to the decline. HSBC Holdings Plc lost 1.1% to 635.8 pence.
Sonova Holding AG fell 1.8% to 144.40 Swiss francs after the maker of hearing aids posted first-half profit that missed analysts' estimates. The strength of the franc against currencies including the euro, the dollar and the Canadian dollar, hurt the results, the company said.
Weir Group Plc declined 3.8% to 2,047 pence. Exane BNP Paribas lowered shares of the engineering company to underperform, similar to a sell, from outperform. The stock slumped 23% from its high on Sept. 3 through the end of last week.
Merck KGaA gained 3% to 76.50 euros. The German company said it will receive $850 million and could get as much as $2 billion in regulatory and commercial milestone payments to develop and commercialize a tumor treatment with Pfizer Inc.
Abengoa SA rallied 11% to 1.67 euros after slumping 49% last week as confusion over the security offered on some of its debt triggered concern it would find it difficult to refinance maturing bonds. The company held a call today and said it will meet with investors in Europe and the U.S. this week.
The number of shares changing hands in Stoxx 600-listed companies was 41% lower than the average of the past 30 days, according to data compiled by Bloomberg.
